Navistar International Corp. (NAV): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


Navistar posted a net loss from continuing operations of $0.04 per share in the third-quarter fiscal 2014, considerably narrower than the Zacks Consensus Estimate for a loss of $0.82. The results benefited from better profitability in the North America Truck and North America Parts segments. Meanwhile, revenues dropped 0.6% year over year to $2.84 billion, missing the Zacks Consensus Estimate of $2.99 billion. In fiscal 2014 Navistar expects Class 8 industry sales between 235,000 and 240,000 units in the U.S. and Canada. The company is positioned to benefit from product launches, cost-saving initiatives and higher production. However, we are concerned about economic uncertainty in Brazil and strict EPA regulations, which are likely to impact profitability. Thus, we have maintained the Neutral recommendation on the stock.


Based in Illinois, Navistar International Corporation (NAV) manufactures and markets International brand commercial and military trucks, MaxxForce branded diesel engines and IC Bus ("IC") branded school and commercial buses. The company also provides service parts for trucks and diesel engines. Navistar is one of the largest truck producers after Daimler and PACCAR Inc.

Navistar operates through four industry segments, North America Truck Segment (65.2% of total revenue in the first nine months of fiscal 2014), North America Parts Segment (23.7%), Global Operations Segment (14.5%) and Financial Services Segment (2.2%). Segment revenues do not add up to 100% due to Corporate and Eliminations.

The North America Truck segment manufactures and distributes medium and heavy-duty trucks (Class 4-8), military vehicles and buses in the North American markets including the U.S., Canada and Mexico. The products are distributed under the International and IC brands. The segment also designs engines under the MaxxForce brand name.

The Global Operations Segment consists chiefly of the operations of the company's wholly owned subsidiary, International Ind stria de Motores da Am rica do Sul Ltda. (IIAA) in Brazil and truck and parts export businesses under the International and IC brands.

The North America Parts Segment supports the brands of International commercial and military trucks, IC buses, MaxxForce engines, as well as the other product lines. The segment provides proprietary products as well as standard truck, trailer and engine service parts.

The Financial Services Segment provides retail, wholesale, and lease financing of products sold by the North America Truck and North America Parts segments, as well as their dealers in the U.S. and Mexico.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: NAV

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